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To: yard_man who wrote (225193)	3/4/2003 10:47:09 AM
From: reaper	Respond to of 436258

(i) that the reflation trade is working; i.e. that the world is not so dangerous and unbalanced a place as we all think it is (we just differ on which direction the imbalances will break) and everything is pretty much fine. internally consistent price movements would be that the dollar would stabilize, the trade deficit would shrink, rates would rise and housing stocks would break their short-term consolidation/downtrends and resume the longer-term uptrends. (ii) that the world is becoming even MORE imbalanced, but we just are not at the housing equivalent of Naz 5000 yet (remember, the stock market bubble went on the better part of 2-3 YEARS longer than most of us thought). internally consistent price movements would be continued fall in TNX, trade deficit continueing to grow (as we trade our home "equity" for the world's goods), dollar continuing its fall (though moderating from the large slide in the last 6-9 months), and housing stocks continuing to be weak in the face of a strong housing market. i don't think (i) can happen, but maybe that's why i'm not a Fed governor and instead just write crap on SI all day. Cheers